Q3 2022 Sprinklr Inc Earnings Call

December 9, 2021

Ladies and gentlemen, thank you for standing by and welcome to Sprinklers third quarter of fiscal 2022 earnings conference call. Joining us today are Ragy Thomas Sprinklers, founder and CEO, Vivek Kundra, Chief operating officer, and Chris Lynch Chief Financial Officer. At this time, all participants are in a listen-only mode.

After the speakers' remarks, there will be a question and answer session. Please be advised that today's conference is being recorded I would now like to hand the conference over to your first speaker today, Mr. Chris Lynch for introductory remarks. Please go ahead, Chris.

Now like to hand, the conference over to your first speaker today, Mr. Chris lunch for introductory remarks. Please go ahead Chris.

Thank you and thanks to everyone for joining us today for Sprinkler's third-quarter earnings call for the three months period ending on October 31st. We issued our earnings release a short time ago filing the associated 8-K with the SEC. And we've also made that available on the Investor Relations section of our website. As a reminder, during today's call, we'll be making forward-looking statements about the business and about the financial results of Sprinkler that involve many assumptions risks and uncertainties and our actual results might differ materially.

As a reminder, during today's call, we'll be making forward looking statements about the business and about the financial results of sprinkler that involve many assumptions risks and uncertainties and our actual results might differ materially.

Any forward-looking statements that we make on this call are based on our beliefs and assumptions as of today and we disclaim any obligation to update them. For more details on the risks associated with these forward-looking statements, please refer to the text in the company's press release issued today and to our periodic reports filed with the SEC, including our quarterly report on Form 10-Q for the quarter ended October 31st 2021 that will be filed with the SEC. With that, let me turn the call over to Ragy.

For more details on the risks associated with these forward looking statements. Please refer to the text in the Companys press release issued today and to our periodic reports filed with the SEC, including our quarterly report on Form 10-Q for the quarter ended October 31st 2021 that will be filed with the SEC.

With that let me turn the call over to Rajiv.

Thanks, Chris and hello, everyone. It is wonderful to speak with all of you again. First and foremost, I'm really pleased to report a really really excellent third quarter that exceeded guidance on all metrics. Q3 revenue grew 32% year over year to 127.1 million and subscription revenue grew 29% year over year to $109.9 million.

First and foremost I'm really pleased to report a really really excellent third quarter that exceeded guidance on all metrics Q3 revenue grew 32% year over year to 127 1 million and subscription revenue grew.

29% year over year.

$209 $9 million.

This is the fourth quarter that we have accelerated our revenue growth rate back to back. Which is a continued validation from the world's largest enterprises that there's a massive need to unify experiences across customer-facing functions and peeps from care to marketing. On all modern channels. And the need is not just to unify customer experiences across functions and teams. It is to unify customer experiences across markets globally. And in many cases, the need is to even unify experiences across brands or business units for multi-branded multi-business unit companies.

Which is a continued validation from the world's largest enterprises that there's a massive need to unify expedient says across customer facing functions and peeps from Kara to marketing.

All modern channels.

And the need is not just to unify customer experiences across functions and teams.

It is to unify customer experiences across markets globally.

And in many cases, they need is to even unify expedience as across brands or business units for a multi branded multi business unit companies.

Our vision and strategy haven't changed since the company was founded 12 years ago. We're here to do three things. One, to lead a new category of enterprise software that we call unified customer experience management. Two, to build the world's most loved and I repeat most loved enterprise software company.

One to lead a new category of enterprise software that we call unified customer experience management too.

Two.

To build the world's most loved and I repeat most loved enterprise software company.

And three, to create a culture that obsesses about customers and treats one another like family. The sustained execution and results that you're seeing from us this quarter are simply a reflection of who we are. And who we always have been. And with this renewed momentum, we have never been more excited about the opportunity in front of us. Our customers are telling us that they want to replace point solutions in the front office with a single platform. That they need that platform to be purpose-built for modern channels.

Another like family.

The sustained execution and results that you're seeing from US this quarter are simply a reflection of who we are.

And who we always have been.

And with this renewed momentum we have never been more excited about the opportunity in front of us.

Our customers are telling us that they want to replace point solutions in the front office with a single platform.

That they need that platform to be purpose built for modern channels.

And that it needs to integrate with other best of suite platforms that they already have. In short, they need more platforms that work well with each other and less point solutions that don't. This is the reason our net dollar expansion increased significantly this quarter. And we now have 80 customers with more than 1 million in trailing 12 months subscription revenue.

This is the reason our net dollar expansion increased significantly this quarter.

And we now have 80 customers with more than 1 million.

In trailing 12 months subscription revenue.

It's clear that every large enterprise in the world is in the midst of their own digital transformation to being customer-centric. And everyone's trying to find ways to deliver a better more unified customer experience. Most are still early in that journey, but for a million-plus customers like Honda and many others like them, they're moving much faster than others are. When you talk to our customers and companies like them. You will see a pattern, it's common for large companies to stock with point solutions in modern channels and try and stitch it together. The problem is it never scales.

And everyone's trying to find ways to deliver a better more unified customer experience. Most are still early in that journey, but for a million plus customers like Honda and many others like them, they're moving much.

Much faster than others are.

When you talk to our customers and companies like them.

You will see a pattern, it's common for large companies to stock with point solutions in modern channels and try and stitch it together. The problem is it never scales.

The problem is it never scales.

And with point solutions, it's impossible for any company to improve the experiences that customers are having with them. It was the right thing to do 510 years ago because there wasn't an alternative. They had to choose between best of breed point solutions or a platform with basic capabilities. Now with Sprinkler they don't.

It was the right thing to do 510 years ago, because there wasn't an alternative they have to choose between best of breed point solutions or a platform with.

Basic capabilities.

Now with sprinkler they don't.

They can make a no-compromise decision with the 31 next-generation capabilities that they need across four major customer-facing functions from marketing to customer care, all on one platform, where everything and everyone can work together. Unification on Sprinkler doesn't happen all at once. It happens in phases land and expand. And with a unified platform as broad as ours, any of our 31 products across our force product suites can be the entry point.

Unification on sprinkler it doesn't happen all at once it happens in phases land and expand and with a unified platform as broad as ours.

Any of our 31 products across our force product suites can be the entry point.

Some customers start by unifying social maybe across markets and business units, then they expand to unify all of marketing, where they have visibility across content and campaigns. And then they unify all of outbound engagement, bringing marketing and seals together. Sometimes customers come at it the other way. Starting by unifying research getting insights in one place and followed by customer care no matter what path. They start the pieces come together on Sprinkler.

And then they unify all of outbound engagement, bringing marketing and seals together.

Sometimes customers come at it the other way.

Starting by unifying research getting insights in one place and followed by customer care no matter what path. They start the pieces come together on sprinkler.

Keeping these companies something that they know they need, a single platform that could become the foundation for unifying the entire customer experience across all modern channels. Enterprises don't start with Unified-CXM. They arrive at it here. Here are two examples.

They arrive at it here.

There are two examples.

Let's start with [Prada]. An incredible company. That's just re-imagining the future of luxury. During my last trip to Europe, I had the privilege of meeting Lorenzo Bertelli. Who the company recently announced asked as future CEO. It was fascinating to hear them describe its vision to unify each brand across in-person and digital channels in order to serve customers when and where they decided the best experience.

An incredible company.

Re imagining the future of luxury during my last trip to Europe, I had the privilege of meeting Lorenzo Bertelli.

Who the company recently announced asked if future CEO. It was fascinating to hear them describe its vision to unify each brand across in person and digital channels in order to serve customers when and where they decided the best experience.

Over the past 18 months, the Prada group has been progressively unifying advertising and engagement and research and care all on Sprinkler to execute against that digital-first strategy and to support the exponential growth that they're seeing on online channels. They started with Sprinklers modern advertising and modern sales and engagement suite pulling. Pulling together five global brands for full visibility into campaign creation publishing performance across modern channels.

With sprinklers modern advertising and modern sales and engagement suite pulling.

Pulling together five global brands for full visibility into campaign creation publishing performance across modern channels.

The group now manages 147 accounts with more than 5,000 messages published from Sprinkler this year. He then added our AI-powered modern research suite tracking 92 million mentions across 183 broad topics. With more than 70 custom dashboards from where they get their insights in real-time. And then Q3 they added a modern care and conversational commerce product, which enables proactive selling and the channels that customers prefer. Another great example is Honda Japan. Who first partnered with Sprinkler in 2016, when it's a data science team adopted our listening product to listen to brand-relevant conversations across social channels and get gab actionable insights. But then they had the display turning that data into interactive experiences for their employees.

This year.

He then added our AI powered modern research suite tracking 92 million mentions across 183 broad topics.

With more than 70 custom dashboards from where they get their insights in real time, and then Q3. They added a modern care and conversational commerce product, which enables proactive selling and the channels that customers prefer.

Another Great example is Honda Japan.

Who first partnered with sprinkler in 2016, when it's a data science team adopted our listening product to listen to brand relevant conversations across social channels and get gab actionable insights.

But then they had the display turning that.

Data into interactive experiences for their employees.

Today Honda Japan has over 100 users on modern research and they track over 100 car models measuring marketing effectiveness, benchmarking social content and engagement against competitors. And detecting and monitoring for crisis. Honda then expanded the usage of Sprinkler to include modern advertising auto care and a modern sales and engagement suites. In Q3, they added voice as a channel for customer care and engagement.

And.

Detecting and monitoring for crisis.

Honda then expanded the usage.

Of sprinkler to include modern advertising auto care and a modern sales and engagement suites in Q3, they added voice as a channel for customer care and engagement.

As the company's eCommerce business started gathering momentum they are Sprinklers first customer to implement voice and Japan, enabling their agents to seamlessly now engage with consumers, however, they choose to connect. As Honda has had this new e-commerce business Yoshiaki San explained to us. Our goal is to connect authentically across channels, and Sprinkler enables us to do that. Sprinkler is a customer-first company.

Honda has had this new e-commerce business Yoshiaki San explained to us.

Our goal is to connect.

Atlantic Lee across channels, and sprinkler enables us to do that.

Sprinkler is the customer first company.

One way that manifests is in our unmatched pace of innovation, which has always set us apart. This quarter was no different. We launched 600 new features and enhancements in the last 90 days that are going to benefit our customers. One of the more exciting innovations in this last release was our persona-based apps. That includes our homepage for each job role in the front office. This puts the insights and workflows that each user needs should do their specific job right at their fingertips. This in other usability innovations like this that we've rolled out in the past several years has consistently made Sprinkler easier and easier to use even for the largest and the most complex use cases.

Is in our unmatched pace of innovation, which has always set us apart. This quarter was no different we launched 600.

New features and enhancements in the last 90 days that are going to benefit our customers.

One of the more exciting innovations in this last release was our persona based apps.

That includes our homepage for each job role in the front office. This puts the insights and workflows that each user needs should do their specific job right at their fingertips. This in other usability innovations like this that we've rolled out in the past several years if can.

System really made sprinkler easier and easier to use even for the largest and the most complex use cases.

We've always said that our key differentiator is our industry-leading AI for unstructured public digital data. I'm proud to announce that we've been awarded two AI patents this quarter. The first one is for our smart responses. Which uses AI to deeply understand the conversation between customers and agents and predict the best response to users questions by understanding the intent.

I'm proud to announce that we've been awarded to AI patents this quarter.

The first one is for a smart responses.

Which uses AI to deeply understand the conversation between customers and agents and predict the best response to users questions by understanding the intent.

And the second one is for a product insight which gives brands highly granular insides into what their customers like and dislike about their products using super advanced artificial intelligence. Fueled by the strength of our research and development modern care continues to be one of our fastest growing products and product suites.

Brands highly granular insides into what their customers like and dislike about their products using super advanced artificial intelligence.

Fueled by the strength of our research and development modern care continues to be one of our fastest growing products and product suites.

As evidenced by a number of care deals this quarter with brands like Honda and Lulu Lemon and Nestle and Prada. This quarter, we released a powerful feature called compliance management to help banking financial services and insurance companies comply with regulatory requirements around the world. And especially countries like Australia.

And especially countries like Australia.

Using our AI compliance management helps these companies automatically identify a complaint and route it to the right agent of resource and audit it to provide end to end accountability across 35 plus partner channels. In other product news, I'm sure you recall that we announced our first self-service product last quarter, our modern research light to make it easier for our target customers to get started with Sprinkler. We're excited about the response we've seen so far and pleased with the positive impact on demand generation and the new prospects it's created in our pipeline.

And auditing it to provide end to end accountability across 35 plus partner channels.

In other product news I'm sure you recall that we announced our first self service product last quarter, our modern research light to make it easier for our target customers to get started with sprint. We're excited about the response, we've seen so far and pleased with the positive impact on demand generation and then.

New prospects, it's created in our pipeline.

This quarter I'm excited to announce the beta release of our next self-service product modern care light. Modern care light works with our modern research sub-service product to provide fairly comprehensive care capabilities in our easy to use interface. Also on the innovation front, we received the 2021 Best of Enterprise Connect award for the best innovation and customer experience for our conversational commerce product. Our new engagement feet feature uses AI to guide customers from intent to purchase helping them with product selection and evaluation along the way.

Also on the innovation front, we received the 2021 best of Enterprise Connect award for the best innovation and customer experience for our conversational commerce product.

Our new engagement feet feature uses AI to guide customers from intent to purchase helping them with product selection and evaluation along the way this quarter.

This quarter, Amazon Web services' ultra awarded us give the government competency partner status that reflects our expertise in delivering a unified platform to address the specific needs of civilian agencies National Defense and intelligence communities state and local government and higher education institutions. On the culture and talent side, we were named to Inc. Magazine's 2021 best-led companies list. It's a testament to our focus in creating value for our customers and investing in our talent and our leadership. We also received [sickness] 2021 well-being award for our commitment to improving the wellbeing of our employees.

On the culture and talent side, we were named to Inks, Inc. Magazine's 2021 best led companies list.

It's a testament to our focus in creating value for our customers and investing in our talent and our leadership. We also received [sickness] 2021 well-being award for our commitment to improving the wellbeing of our employees.

For me personally, the best thing about being a public company in the last six months or so has been the incredible opportunity that I've had to meet with some of the smartest people in the world. Some investors to customers across the entire enterprise software space. Having done over 60 investor meetings and more than 50 customer meetings this quarter with the CIOs and CDOs and CMOs and the heads of customer care across tech and telco and health care in CPG in luxury retail at automotive and hospitality. I can tell you one thing the message we're hearing is the same across industry and across these different functions and teams and executives.

Some investors to customers across the entire enterprise software space.

<unk> done over 60 investor meetings.

And more than 50 customer meetings this quarter with the C. I OS and Cdos and C. M OS and the heads of customer care across tech and telco and health care in CPG in luxury retail at automotive and hospitality.

I can tell you one thing the message we're hearing is the same.

industry and across these different functions and teams and executives.

Point solutions are simply not sustainable. They're siloed expensive as noncompliant. In closing, I'd like to summarize a couple of thoughts. First, we believe that every large company will need what we are building. And as a result, the rise of this category is inevitable. Second, we believe that with our focus on innovation and specifically customer-led innovation, Sprinkler will lead the way. I like to thank our customers, partners and all of you our investors for the trust you place in Sprinkler every day and most of all, thank you to over 3000 of our own Sprinkle of rights for everything you do the best is really yet to come. With that, let me turn it over to Vivek.

In closing I'd like to summarize a couple of thoughts.

Bruce.

We believe that every large company will need what we are building.

And as a result, the rise of this category is inevitable.

Second we believe that with our focus on innovation and specifically customer led innovation sprinkler will lead the way I like to thank our customers partners and all of you our investors for the trust you place in sprinkler every day and and most of them.

10-Q, two over 3000 of our own sprinkle of rights for everything you do the best is really yet to come with that let me turn it over to Vivek.

Thank you, Ragy, and good afternoon, everyone. In Q3, we had phenomenal execution across every function with revenue increasing 32% year over year. This performance is validation not only that our go-to-market strategy is working but that this company continues to scale up and deliver across multiple products and in every market around the world from America to Europe to APJ.

This performance is validation not only that our go to market strategy is working but the this company continues to scale up and deliver across multiple products and in every market around the world from America to Europe to a P. J.

You've heard us talk about Sprinkler being a story of reaccelerating in growth and over the past year, you've seen exactly that. We've increased our revenue growth rate for four quarters in a row. This growth this power not only by strength in our new bookings upsells and cross-sells. But also by the fact that we'll continue to have world-class customer retention across the board.

But also by the fact that we'll continue to have world class customer retention across the board.

From our largest and most strategic global customers towards smaller enterprise customers. That retention is a clear indication of the stickiness and immense value these enterprises are realizing from our platform. And it's even more evident when you look at our 1 million-plus customer base. As of Q3, we now have 80 customers globally, generating 1 million-plus or more and subscription revenue.

Retention is a clear indication of the stickiness and immense value. These enterprises are realizing from our platform.

And it's even more evident when you look at our 1 million plus customer base.

As of Q3, we now have 80 customers globally, generating 1 million plus or more and subscription revenue.

These are the world's largest and most iconic brands like Microsoft Vodafone and Twitter and they represent the best of what Unified-CXM looks like. Today, 90% of these 1 million-plus customers have at least three of over four product suites, and they continue to expand with us quarter after quarter. As you've heard me say before we have a growth flywheel, that's working at scale across our customer base with a proven ability to upsell cross-sell and expand across brands and geographies.

Today, 90% of these 1 million plus customers have at least three of over four product suites, and they continue to expand with us quarter after quarter.

As you've heard me say before we have a growth flywheel, that's working at scale.

Loss of our customer base with a proven ability to upsell cross sell and expand across brands and geographies.

I want to congratulate the team on driving a significant increase in our net dollar expansion this quarter to 117%. From our ability to upsell expanding in an account like Pepsi with hundreds of new seats for modern sales and engagement and a significant expansion in modern research. Our ability to cross-sell landing in an account like Kingston technology with modern sales and engagement and modern research and expanding into modern care. To our ability to expand across brands and GEOs as we've done repeatedly with Samsung and did again this quarter as they added hundreds of new modern care licenses expanding into Latam Southeast Asia and India.

From our ability to upsell expanding in an account like Pepsi with hundreds of new seats for modern sales and engagement and a significant expansion in modern research.

Our ability to cross sell landing in an account like Kingston technology with modern sales and engagement and modern research and expanding into modern care to our ability to expand across brands and geos as we've done repeatedly with Samsung and did again this quarter as they added hundreds of new <unk>.

care licenses expanding into Latam Southeast Asia and India.

We continue to see our primary growth factor and focus on large enterprises with 1 billion plus in annual revenue paying off. With expansions like these and others from brands like Nestle, Lulu Lemon and Super Dry. The addition of new logos like Hugo Boss and land O Lakes. And with thousands of companies still left to target as our sales capacity continues to grow, we've never been more confident in this segment's ability to fuel durable sustainable growth for years to come.

With expansions like these and others from brands like Nestle, Lulu Lemon and Super dry. The addition of new logos like Hugo boss and land O Lakes.

And with thousands of companies still left to target as our sales capacity continues to grow, we've never been more confident in this segment's ability to fuel durable sustainable growth for years to come.

But it's not just her first growth factor that gives us confidence. We also have momentum in our second-growth sector focused on enterprises with $100 million to 1 billion-plus in annual revenue. These are also larger organizations grappling with point solution chaos. And in Q3 was signed up amazing new customers like Ledger cross country mortgage and Everland, we see tremendous opportunity in this sector.

These are also larger organizations grappling with point solution chaos.

And in Q3 was signed up amazing new customers like Ledger cross country mortgage and Everland, we see tremendous opportunity in this sector.

That's why last quarter, we introduced a self serve way for enterprises to try a free lightweight version of Sprinkler to accelerate and drive greater efficiency in our inbound demand Gen efforts. We're pleased with the early results from modern research light and had a few thousand brands sign up in just a few months. It's still early but we're already seeing that activity drive demo requests for our full solution and bring new prospects into the pipeline.

We're pleased with the early results from modern research light and had a few thousand brands sign up in just a few months, it's still early but we're already seeing that activity drive demo requests for our full solution and bring new prospects into the pipeline.

And with modern care light now available in beta we will continue to innovate and expand our footprint in the second vector. Another pillar of our growth flywheel is our partner ecosystem. In Q3, these partners helped us land and expand significant customer wins like land O Lakes Jumbo, Alaska Air and Prada. In addition to four 1 million-plus are our deals we continue to expand our international footprint as well, adding fantastic new partners like cap Gemini to extend our presence in Europe, and Wipro to broaden our reach throughout the Middle East and Asia.

Another pillar of our growth flywheel as our partner ecosystem in Q3. These partners helped us land and expand significant customer wins like land O Lakes Jumbo, Alaska Air and Prada. In addition to four 1 million plus are our deals we continue to expand our international.

Footprint as well, adding fantastic new partners like cap Gemini to extend our presence in Europe, and Wipro to broaden our reach throughout the middle East and Asia.

Now I'd like to share two customer wins from this quarter. Tik Tok and MGM resorts. Tik Tok is only three years old and with over 1 billion users around the world. It's already one of the fastest-growing entertainment services company in history. When I met with the company's global head of marketing recently, it was clearer Tik Tok is focused on delivering great experiences at an imaginable scale.

When I met with the Companys global head of marketing recently it was clearer tictoc is focused on delivering great experiences at an imaginable skill.

In early 2020, Tik Tok turned to Sprinkler to do just that. Starting with its global marketing team before quickly expanding to more than 20 countries spanning multiple business units teams and external agencies. All of which are now unified on Sprinkler. In Q3, Tik Tok added even more users and bought Sprinkler into another new region. Southeast Asia. Expanding partnership that now includes modern research, modern sales and engagement and modern care. With modern research, Tik Tok leverages advanced AI to make sense of what's being said about one of the world's most talked-about brands. Distilling relevant conversation into real-time insights about Tik Tok brand perception and market trends.

Starting with its global marketing team before quickly expanding to more than 20 countries spanning multiple business units teams and external agencies.

All of which are now unified and sprinkler.

In Q3 picked up added even more users and bought sprinkler into another new region.

Southeast Asia expanding partnership that now includes modern research modern sales and engagement and modern care.

With modern research Tictoc Leverages advanced AI to make sense of what's being said about one of the world's most talked about Brent.

Distilling relevant conversation into real time insights about tuck duct brand perception and market trends.

With modern sales and engagement, Tik Tok isn't just collecting feedback. They're taking action empowering their teams to interact with users across multiple channels. And with modern care. Tik Tok has been able to provide best in class support. Now, let's switch gears to MGM. The hospitality and entertainment industry was hit hard during the global pandemic and MGM resorts International, a Sprinkler partner for over eight years, was no exception.

And with modern care.

Talk has been able to provide best in class support.

Now, let's switch gears to M. G M. The hospitality and entertainment industry was hit hard during the global pandemic and MGM resorts International a sprinkler partner for over eight years was no exception.

A global entertainment company with destination resorts around the world. The story of MGM over the past 18 months is one of triumph over adversity. For years, MGM has managed its entire customer experience workflow within Sprinkler. Including 913 accounts across 14 channels using modern research to gather deep insights about its brand and modern sales and engagement to surprise and delight its guest with unforgettable experiences.

For years MGM has managed its entire customer experience workflow within sprinkler.

<unk> 913 accounts across 14 channels using modern research to gather deep insights about its brand and modern sales and engagement to surprise and delight its guest with unforgettable experiences.

When the pandemic hit, Sprinkler became more vital to MGM than ever before. Not just because MGM needed critical insights about customer sentiment that we're changing by the minute, but also because with many of its employees furloughed they needed to be able to do more with less.

Not just because MGM needed critical insights about customer sentiment that we're changing by the minute, but also because with many of its employees furloughed they needed to be able to do more with less.

Sprinklers AI capabilities have been central to helping the company triage 300,000 plus inbound messages and more than 50,000 guest reviews so far this year. Automatically categorizing each one and identifying those that need immediate attention. In Q3, MGM implemented location insights for more than 300 restaurants, bars and hotels to provide an even more granular set of insights helping them take targeted location-specific actions to improve the guest experience.

Elemental location insights for more than 300 restaurants bars and hotels to provide an even more granular set of insights helping them take targeted location specific actions to improve the guest experience.

When asked about our partnership, Christina [Arietta] our executive director of social strategy said these insights allow us to achieve our number one priority. Guest centricity, while simultaneously mitigating risk to our brand, which has been critical for MGM over the past year and a half. Today, 1100 of the world's largest and most valuable enterprises turned to Sprinkler for three reasons.

These insights allow us to achieve our number one priority.

Centricity, while simultaneously mitigating risk to our brand, which has been critical for MGM over the past year and a half.

Today ILG.

100 of the world's largest and most valuable enterprises turned to sprinkler for three reasons.

First, the depth and breadth of our unified systems platform is unmatched and purpose-built for the enterprise. Our industry-leading AI enables enterprises to make sense of unstructured customer experience data and act on it at scale third will deliver meaningful ROI for our customers, helping them increase revenue reduce costs or mitigate risks. With that, let me turn the call over to Chris Lynch to review the financials. Chris.

Our industry, leading AI enables enterprises to make sense of unstructured customer experience data and act on it at scale third will deliver meaningful ROI for our customers, helping them increase revenue reduce costs or mitigate risks.

With that let me turn the call over to Chris Lynch to review the financials.

Chris.

Thanks, Vivek. Today I'm going to provide a brief overview of our third-quarter financial results and provide guidance for the fourth quarter and also for our full fiscal year, both of which ended on January 31st of 2022. And then we'll open it up for questions. I should point out that in addition to our GAAP financial results, I'll also be discussing certain non-GAAP numbers today.

I should point out that in addition to our GAAP financial results I'll also be discussing sit and non-GAAP numbers today.

Our GAAP results along with the reconciliation between GAAP and non-GAAP results can be found in today's earnings release and on our Investor Relations website. As you've heard from both Ragy and Vivek already, we delivered another really strong quarter across the board accelerating the pace of our topline growth yet again.

As you've heard from both raunchy and Vivek already we delivered another really strong quarter across the board accelerating the pace of our topline growth yet again.

Last quarter, we reported revenue growth of 27%. And this quarter, we are reporting another significant acceleration with total revenue up 32% year over year to $127.1 million. That's driven largely by subscription revenues of $109.9 million, which grew 29% versus Q3 of last year. Our non-GAAP subscription gross margin improved to 80% in Q3, which helped us deliver a non-GAAP total gross margin of 71%.

That's driven largely by subscription revenues of $109 $9 million, which grew 29% versus Q3 of last year.

Our non-GAAP subscription gross margin improved to 80% in Q3, which helped us deliver a non-GAAP total gross margin of 71%.

And on the bottom line, we generated a non-GAAP operating loss of $13.5 million for the quarter, while using just 1.1 million in operating cash flow and only $4.1 million in free cash flow. That impressive cash flow result, helped us end the quarter with well over half a billion dollars of cash and short term investments on the balance sheet. So we have plenty of capital to continue growing the business.

That impressive cash flow result, helped us end the quarter with well over half a billion dollars of cash and short term investments on the balance sheet. So we have plenty of capital to continue growing the business.

I'm also happy to report a notable 300 basis point increase in our net dollar expansion rate this quarter to 117%. That calculation you remember, it's using trailing 12-month subscription revenues and this dramatic increase over the last 90 days is further evidence that the go-to-market investments we started making in the back half of last year are continuing to pay off.

That calculation, you'll remember he's using trailing 12 month subscription revenues and this dramatic increase over the last 90 days is further evidence that the go to market investments, we started making in the back half of last year are continuing to pay off.

That's true of our billings as well, which were up year over year by 31% and that's the third consecutive quarter that our billings growth has been up by at least 30% versus the prior year. Current remaining performance obligations or CRPO, which represents contracted revenues that will be recognized over the next 12 months that was $329.6 million at the end of Q3, and that's up 29% versus Q3 of last year.

Current remaining performance obligations or C. L. P O, which represents contracted revenues that will be recognized over the next 12 months that was $329 $6 million at the end of Q3, and that's up 29% versus Q3 of last year.

And then finally, as you heard from Ragy earlier, we now have over 80 customers contributing $1 million or more in subscription revenue over the last year. That's also a 29% increase year over year and that momentum just speaks to the strategic value that a unified-CXM platform is creating for the world's largest and most valuable brands.

That's also a 29% increase year over year and that momentum. It just speaks to the strategic value that a unified <unk> platform is creating for the world's largest and most valuable brands.

So that brings me to guidance for the fourth quarter of fiscal '22 ending on January 31st. We expect subscription revenue to be within the range of $113 million to $115 million that represents 27% growth year over year at the midpoint. And we expect total revenue for the quarter to be in the range of 129 and $131 million, representing 25% growth year over year at the midpoint.

We expect subscription revenue to be within the range of $113 million to $115 million that represents 27% growth year over year at the midpoint.

And we expect total revenue for the quarter to be in the range of 129, and $131 million, representing 25% growth year over year at the midpoint.

It's only a small piece of our total revenue, but it's probably worth calling out the service revenue grew 52% last quarter due to some really strong execution from our team. And while the service business remains strong into Q4, particularly our recurring services, we're expecting the growth rate in services to normalize in Q4, which is why subscription revenue guidance is at 27%, while total revenue guidance is at 25%.

You can see that 27%, while total revenue guidance is at 25%.

Consistent with the operating plan we set out at the start of the year, we expect our non-GAAP operating loss in Q4 in the range of $21 million to $23 million and a non-GAAP net loss per share of 8 to 9 cents, assuming 260 million weighted average shares outstanding. For our full fiscal year, which also ends on January 31st we're providing the following guidance.

For our full fiscal year, which also ends on January 31st we're providing the following guidance.

We expect subscription revenue to be in the range of $423 million to $425 million, representing 25% growth year over year at the midpoint and we expect total revenue to be within the range of $486 million to $488 million. That represents 26% growth year over year at the midpoint. For the full year, we expect our non-GAAP operating loss in the range of $48 million to $50 million and we expect a non-GAAP net loss per share between 30, and 31 cents, assuming 195 million weighted average shares outstanding.

Resents, 26% growth year over year at the midpoint.

For the full year.

We expect our non-GAAP operating loss in the range of $48 million to $50 million and we expect a non-GAAP net loss per share between 30, and 31 cents, assuming 195 million weighted average shares outstanding.

Results like these on created overnight, so I want to echo what both Ragy and Vivek said and thank everyone at the company for delivering such a strong result this quarter and for helping us to start capitalizing on our huge market opportunity, on our technology leadership and for helping to create a durable multi-year growth opportunity here at Sprinkler.

Opportunity here at sprinkler.

Let me leave you with a summary of these results as I see them. Last year, we laid out a plan to dramatically accelerate the revenue growth of this business and with four quarters of accelerating growth rates, we've delivered on and actually exceeded that plan. We said we had the right product in the right market at the right time, and that's and that we needed to invest in our go-to-market machine to build out distribution.

Last year, we laid out a plan to dramatically accelerate the revenue growth of this business and with four quarters of accelerating growth rates, we've delivered on and actually exceeded that plan. We said we had the right product in the right market at the right time, and that's and that we needed to invest in our go to market machine to build out distribution.

That's exactly what we've been doing and today, we've got more sales capacity than we've ever had. We have a bigger global footprint than we've ever had and there's more awareness than ever before of the value we're creating for our clients. And this incredible momentum in our business can be seen in every one of the metrics I just talked about. Whether it would be net dollar expansion subscription revenue growth CRPO, billings or the number of customers paying us more than a million dollars each year. That's why as we round the corner towards our next fiscal year, the team here at Sprinkler is so excited about the opportunity ahead. With that, we're happy to take your questions.

Billings or the number of customers paying us more than a million dollars each year, that's why as we round the corner towards our next fiscal year. The team here at sprinkler is so excited about the opportunity ahead.

With that we're happy to take your questions.

Thank you at this time, we will be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if he would like to remove your question from the queue. For participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys. Please note we ask that you limit yourself to one question and one follow up per person. One moment please while we poll for questions. Our first question is from [inaudible] of Barclays. Please proceed with your question.

To ask a question. Please press star one on your telephone keypad.

Formation Tonala indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys. Please note. We ask that you limit yourself to one question and one follow up per person one moment. Please poll for questions.

Our first question is from Ramsey El <unk> of Barclays. Please proceed with your question.

Hey, this is Frank on for Raimo. Congrats on the results today. A large customer adds accelerated again this quarter. Can you provide a bit more color behind that? Was this growing customers across that threshold or really more landing above the $1 billion mark there? This was a growing customers across the board and you know consistent with previous quarters with a similar mix in terms of upsells and new logos.

A large customer adds accelerated again this quarter you forgot it some more color behind that was this growing customers across that threshold or really more landing above.

The $1 billion Mark there.

Yeah.

This was a growing customers across the board and you know consistent with previous quarters with a similar mix in terms of Upsells and new logos.

And what's been really exciting though is when you think about the 81 million-plus customers that's up 29% year over year. We expanded our customers like Pepsi, Keystone Samsung Nestle. And the new logos and customers like Hugo Boss, Atlanta Lakes, but also when we talk about vector to, we continued to add new logos. Ledger across country mortgage whenever lane and saw partners step in and add even more value this particular quarter.

And the new logos and customers like Hugo Boss Atlanta Lakes, but also when we talk about vector to we continued to add new logos.

Ledger across country mortgage whenever lane and <unk> partners.

Stuff been and add even more value.

This particular quarter.

That's great to hear and I was wondering if you could give an update as well on the sales hiring and ramping. Was there any impact that we should consider also from the tighter labor market? So I think, look from a sales capacity perspective, we've inflected up and you're seeing the result of that inflexion in terms of going from 19% to 27% or 32%. And we've got the highest sales capacity, we've ever had and as we look ahead in terms of Q4, we're seeing good kind of pipeline and the demand environment. And as far as the labor market is concerned, you know I think look every company around the world is contending with a great resignation.

Was there any impact that we should consider also from the tighter labor market.

So I think look for Brazil's.

Possibly perspective, we've inflected up and Youre seeing the result of that inflection in terms of going from 19% to 27% or 32%.

And we've got the highest sales capacity, we've ever had and as we look ahead in terms of <unk>.

Q4, we're seeing good kind of pipeline and the demand environment and as far as the labor market is concerned you know I think look every company around the world is contending with a great resignation.

But as we came out of COVID, one of the things that we did do is make sure that we're inflicting up and we believe we're in good position with the capacity that we have. One of the things we've been doing is streamlining sort of that internal career progression within our go-to-market organization, where somebody can start right out of the University into an XDR program and then SDR program then into account executives. So we think we have a good shot medium term strategy too to address and get ahead of the labor shortage.

One of the things we've been doing is streamlining sort of that internal career progression within our go to market organization, where somebody can start right out of the University Intuit Xdr program and then SDR program then into account executives. So we think we have a good shot.

strategy too to address and get ahead of the labor shortage.

And I would also add back to your question, Raimo. I think what you're seeing is market recognition of what we've been saying for a long time. And it is the point solutions. It isn't sustainable for all these modern channels right and there are more modern channels and more customers are jumping onto channels like Tik Tok and the newer ones.

Is it sustainable for all these modern channels right and there are more modern channels and more customers are jumping onto.

Channels like take talking and the newer ones.

They can go to more of a point solutions. And what we're seeing I'd say you know having done so many customer meetings in the last three months. What we're seeing is sort of a recognition that Sprinkler is probably the only viable third or fourth platform in the enterprise. And so we're not talking SMB, we're talking about large global companies that take 3, 6, 9 months to execute a procurement contract and in that segment of the recognition that yes, we would think Microsoft Salesforce, yes, we've picked Adobe. Now, who is the third who's the fourth platform, how do we get to 18% of the functionality at 19%? And with 31 products, we're the shortest path to that consolidation, which you know I think, ID teams would agree that they need because of the point solution chaos is just is unsustainable.

In the enterprise and so we're not talking SMB, we're talking about large global companies that take 369 months to execute a procurement contract and in that segment of the recognition that yes, we would think Microsoft Salesforce, Yes, we've picked Adobe now who is the third who's the fourth platform, how do we get to 18% of that.

Saturday at 19% and with 31 products, where the shorter shortest path to that consolidation, which you know I think I D teams would agree that they need because of the point solution chaos is just is.

Unsustainable.

Uh huh.

Our next question is from Mark Murphy of JPMorgan. Please proceed with your question. Yeah. Thank you very much and congrats on the very nice acceleration that you're seeing in the business. So Ray, I wanted to ask you what do you think is underpinning the success that you've been having recently in some of these very large cloud-based contact centers or [CCAS]? I think you've had some of those wins that have been thousands of agencies and I'm wondering if the addition of some of the voice offerings or excuse me the voice APIs from Amazon and Twilio might be creating a tailwind. And then if I could sneak in a follow up for Chris. I was wondering maybe I heard all your comments on sales capacity, where are we in the cycle of kind of ramping up the quota-carrying sales rep headcount? I'm just wondering you know does it continue to rise pretty rapidly in the second half and beyond? Or is it kind of is the sales and marketing spend as a percentage of revenue kind of maybe peaking out somewhere around now?

Yeah. Thank you very much and congrats on the very nice acceleration that you're seeing in the business. So rajeev I wanted to ask you. What do you think is underpinning the success.

But you've been having recently in some of these very large cloud based contact centers or or see Cas are where you think you've had some of those wins that have been thousands of agencies and I'm wondering if I'm. The addition of some of the voice offerings or excuse me the voice API.

Amazon and Twilio might be creating a tailwind. And then if I could sneak in a follow up for Chris. I was wondering maybe I heard all your comments on sales capacity, where are we in the cycle of kind of ramping up the quota-carrying sales rep headcount? I'm just wondering

you know does it continue to rise pretty rapidly in the second half and beyond? Or is it kind of is the sales and marketing spend as a percentage of revenue kind of maybe peaking out somewhere around now?

Or.

Is it kind of is the sales and marketing spend as a percentage of revenue kind of maybe peaking out somewhere around now.

Mark, thank you very much, great question. Let me kind of just double click on what we're seeing in customer care as we outlined in previous quarters and at our [IPO,] care is something that we're putting a lot of focus on as a company. As you know, we got started with customer care in modern channels. So someone's treating it you or sending or Whatsapp messenger, or Google messaging you or Apple messaging you. That digital interaction shows up with a lot of context the text message and if you have deep AI like we do we were able to understand what product what problem and the agent who is best qualified to resolve it and then suggest using AI smart response, which makes an average Aegean as modest diversity and they got in that specific product. And we've been innovating with concepts like guided paths and allowing agents to just really dumb down the resolution. And while integrating to all other systems like the traditional care solutions do, and so what we're seeing is a first generation of customer care clients are actually seeing victory on both sides. They are seeing dissatisfaction go down because we can intervene using AI and real-time with Vantiv mandate and either route to a different agent or come up with a better fastest solution.

Let me kind of just double click on what we're seeing in customer care as we outlined in previous quarters.

D O care is something that we're putting a lot of focus on as a company.

As you know, we got started with customer care in modern channels. So someone's treating it you are sending or Whatsapp messenger, Google messaging, you or Apple messaging you.

That digital interaction shows up with a lot of context, the text message and if you have deep AI like we do we were able to understand what product what problem and the agent who is best qualified to resolve it and then suggesting using AI smart response, which makes.

And average Aegean as modest diversity and they got in that specific product and we've been at.

Product tissue and we've been innovating with concepts like guided paths and allowing agents to just really dumb down the rest of the Lucia and while integrating to all other systems like like like the traditional care solutions do and so what we're seeing is a first generation of customer care.

Clients.

Or actually seeing victory on both sides there seeing dissatisfaction go down because we can intervene using AI and real time with Vantiv mandate.

either route to a different agent or come up with a better fastest solution.

They've seen the satisfaction go down or cease that go up. And they're also seeing costs go down because of the integrated nature of chatbots and AI that goes into the platform and the guided path of the spot responses. So this double victory is I think of it, it's a big big thing for them and we are benefiting from more cases moving to modern channels from voice and email number one. Number two, we're also benefiting from customers going hey, if I'm spending 30% less on these channels because we are doing such a good job of AI based optimization, how do I move my life cat over how do I move my voice over.

And they're also seeing costs go down because of the integrated nature of chat bots and AI that goes into the platform and the guided path of the spot responses. So this double victory.

Think of it it's kind of it's a big big thing for them and we are benefiting from more cases moving to modern channels from voice and email number one number two we're also benefiting from customers going Hey, if I'm spending 30% less on these channels because we are doing such a good job of.

AI based optimization, how do I move my life cat over how do I move my voice over.

And I mentioned already that our first set of clients going live on voice and Honda just did. And live chat by the way has quickly become it's our number two care channel today. And it's just eclipsed all our other social and messaging channels. And that's one of our newer innovations. That's where we go up against traditional like chat only competitors some of which are public companies.

And it's just eclipsed all our other social and messaging channels and that's one of our newer innovations that's where we go up against traditional like chat only competitors some of which are public companies.

And so we're benefiting from more volume shifting to modern channels and we're benefiting from customers wanting to take what they were doing on modern digital channels care solution using Sprinker and trying to move more channels to this. Does that makes sense?

Care solution using strip and trying to move more channels to this.

Makes sense.

Yes, it does. I did not realize the live chat have become your number two channel today. So yes, that's pretty fascinating. Hey, Mark, it's Chris. Let me pick up on the second element of your question. Last year, you remember, we generated positive income on a non-GAAP basis.

Did not realize the live chat have become due number two channel today. So yes, that's that's pretty fascinating.

Yeah.

Hey, Mark it's Chris let me pick up on the second element of your question last.

Last year, you remember, we generated positive income on a non-GAAP basis.

We have a free cash flow positive in both of the last two fiscal years. So we know how to run an efficient business and make money. But we raise capital not to put it in the bank and get 20 bps of interest but to deploy some of it and accelerating that top-line growth. And towards the end of last year, we laid out a plan to do that and with full course accelerating growth rate, we're absolutely delivering on that plan. That plan required us to invest in our go-to-market machine and build out that distribution channel and that's exactly what we've been doing over the last 12 months and as Vivek said, we've got more sales reps than ever before and more sales capacity than we've ever had before. And that's the reason you're seeing that sustained acceleration on the top line. And at this scale, we can start driving meaningful leverage into the model when we're ready, but we think the approach we're taking right now is going to generate much more value for our shareholders in the long run. And this is a conservatively run business and we're very conscious of the need to balance that level of investment with the level of growth, but we think we've got the right balance at the moment.

<unk> on that plan that plan required us to invest in our go to market machine and build out that distribution channel and that's exactly what we've been doing over the last 12 months and as Vivek said, we've got more sales reps than ever before and more sales capacity than we've ever had before and that's the reason you're seeing that sustained acceleration on the top line and at this scale, we can start driving meaningful leverage into the model.

ready, but we think the approach we're taking right now is going to generate much more value for our shareholders in the long run. And this is a conservatively run business and we're very conscious of the need to balance that level of investment with the level of growth, but we think we've got the right balance at the moment.

If you think about it we just grew our top line by 32%, we delivered $127 million in revenue, which anyway, you slice it that makes us a half a billion dollar revenue run rate business. And we did that spending just $1.1 million in operating cash flow. And we think that's pretty darn efficient. So right now we continue to add sales capacity pretty aggressively.

To add sales capacity pretty aggressively.

Understood. Thank you very much. Thank you, Mark. Our next question is from Michael Teran of Wells Fargo. Please proceed with your question. Hey, there. Good afternoon. Appreciate you taking the questions. I guess first, I mean Sprinkler has historically operated as a market-focused we've seen average JSPs in the hundreds of thousands. Can you talk more around the lighter touch self-service products and how those fit or complement that vision? Or those customers you are currently addressing or those waves to get more enterprise customers trialing pieces of the platform and converting over to the broader platform or maybe you can just expand on the vision there.

Thank you Mark.

Our next question is from Michael Teran of Wells Fargo. Please proceed with your question.

Hey, there. Good afternoon. Appreciate you taking the questions I guess first I mean sprinkler has historically operated as a market focused we've seen average Isps in the hundreds of thousands can you talk more around the lighter touch self service products and how those fit or complement that vision or those customers. You are currently addressing or those waves.

To get more enterprise customers trialing pieces of the platform and converting over to the broader platform or maybe you can just expand on the vision there.

Thank you, Michael. So I can confirm that the current strategy is to use this self-service you know trial easy to use products as a on-ramp to experiencing our brand and our enterprise suite. So we've talked consistently about two vectors of growth. Vector one is the biggest 10,000 companies in the world of which we already have over 1,000 brands as customers. What we wanted to do is we look at the next 5, 10, 15, 20 years, but we wanted to do starting you know a couple of quarters ago was how do we go from looking at those 10,000 companies, where we can have reps called one to one to the next 90,000 because we think we are a great fit for companies.

I can confirm that the current strategy is to is to use these south of US you know trial easy to use products as a on ramp to experiencing our brand and our enterprise suite. So we've talked consistently about two vectors of.

Growth record one is the biggest 10000 companies in the world of which we already have over 1000 brands as customers.

What we wanted to do is we look.

Look at the next 510 15 20 years, but we wanted to do starting you know a couple of quarters ago was how do we go from looking at those 10000 companies, where we can have reps called one to one to the next 90000, because we think we are a great fit for companies.

Let's say $100 million or more in revenue in most sectors around the world and you know 90000 companies cannot be called on and demo down in the one to one basis. So our self service products or wait for us to introduce our products and capabilities to that vector to go to the next 90000, where they can.

Move down that funnel and ramp on so that it's easier for them for us when they contact sales when we contact them for us to get them closer to signing a contract. So today. It's it's it's not a move to go beyond our 100000 target customers.

You know we've seen this movie so many times you know whatever works for the next 90000 is at some point easily extensible to too long past that but we think there's a big company to be built just invested two and as we expand vector one and as we expand director too we think that will really.

Feeding the opportunity and it really large marketplace.

And just to add to what Roger said you know these are still you know companies that are very large with complex.

The the point solution chaos.

And they have revenue of between $100 million to 1 billion.

And the goal of these life products is to watch accelerate and drive greater efficiency as Roger said.

And in terms of making sure our inbound engine continues to become more and more efficient.

That's helpful. Oh, very sensible I guess, just one if I may on the financials and Chris. The Billings you mentioned third straight quarter of 30 plus percent billings growth. It did tick down modestly sequentially here in Q3, it's consistent with what we've seen from the model. So.

Is there any characterization you can just provide on the seasonal profile of its its more Q2 Q4 heavy or anything else. We should just take into context. There is helpful. Thank you yeah. Yeah. Thanks for the question. So I think as you probably is the interesting thing. This quarter is the all of the metrics that we look at as potential leading indicators to revenue growth are aligning you've got.

Revenue growing at 29% you got C. L. P O growing at 29% and you got billing growing at 31% that sequence is actually subscription revenue C. L. P O and billing is actually how we internally prioritize the order of those metrics in the context of which are better leading indicators to revenue growth specific to the billing question I've mentioned before billing can be a little lumpy.

For us in part because I've got more than half a billion dollars in the bank and I tend to be more flexible on building what I need to be so when you look at billing over an extended period of time, you can look through some of that quarterly lumpiness in all three quarters. So far this year as I mentioned of billing has grown by more than 30% and I think full year billings growth of 30% is how.

You should think about your modeling for Q4, hopefully too now that you've got C. O P O as of a year over year metric, which we didn't have law school, where you can lean on that a little bit more which is a which is a bit more of a robust metric is a leading indicator.

I think just the fact that the old metrics are landing in and around the 30% growth Mark kind of help us triangulate things as well.

Our next question is from Dan Watzke of Morgan Stanley. Please proceed with your question.

Perfect. Thank you so much guys and congratulations on a strong quarter I wanted to actually follow up on the prior question on sprinkler like.

Could you maybe you can just refresh us on.

What are the differences between the core sprinkler product in the sprinkler like product.

Which are the components of truly make it light and you know what if what if some of the initial feedback been from customers participating in beta and when could we see the beta transition over to.

Product being generally available and I have a quick follow up.

Sure. Thank.

Thank you Stan and our approach with the.

The light products is to do two things a older core capabilities are there and we've stripped down to things that like really advance large enterprise deployments need. The second thing is is is different about the light product versus the enterprise product is the fact that in the light product.

Most of our sprinklers powerful capabilities are pre configured either by industry or by like the solution set like for example in research the products the locations all of those things by industry with pre configured makes it super easy for someone to get started but.

As you know large companies wanted to just really get their hands into tweaking and tuning it right customize AI models trained them all of that so it really gives you the entry point and then once you experience. It you go well I know this is working for me and if I'm able to customize distribute that atmel workspaces.

Dan that's what really we can use as a large company and so that's really the distinction that make we started with the research product.

Today, we are launching our care product in beta, which we're super excited about and the research in Canada decided to work together right think about that one started review actually at one 800 customer call. When you have research and listening connected to cure.

And then we'll go on to launch engagement and then we'll follow it up with marketing and by let's say end of next year.

Gonna have this unified front office available in a in a self service mode. Now that's a good time for us to make a decision on hey are we going to use this as a revenue generator or are we going to just use this as a pipeline demand generator and today, it's the pipeline demand generator. So we're really not investing into customers stay.

On there forever, but more as hany expedient the product expedient the capabilities the power and you can experience our brand and can we talk into that what you really need an EBIT coming enterprise cloud.

Perfect. That's very helpful quick housekeeping.

The housekeeping or two housekeeping points for Chris If we look at billings and essentially if we do total billings for the year around 30% that implies roughly 20% year on year growth in Q4 for billings can you just give us a kind of a little bit of background here last year in Q4 <unk>.

Billings, essentially where zero percent growth current billings were 2% what does that what are the dynamics that we need to keep in mind from Q4, a year ago that inform the kind of twentyish percent implied billings growth for Q4 of this year.

Yeah, there's a little bit of seasonality than in our billing and it kind of.

As a pattern where are renewals happen, but the year over year comparison is against the Covid. Yeah. We did I think I've mentioned before we did some pretty unnatural things to really support our customers many of whom are well challenge when their business is going to shut down and so we pushed it a whole bunch of the billing that we would ordinarily would have pushed into the earlier part of the year.

Into the back half and that's why you're seeing the sort of the year over year growth around the 20 something percent Mark This year you see.

Earlier this year Q1 for US was 45% if I recall year over year growth and so it's a bit of a non natural pattern. This year, just because of the strange billing pattern in the color of the year.

Got it. Thank you and of course did you did you give out a customer account number I don't know if I total customer account I don't know if I missed it yep. Yeah. It's it's it's 1100 I think Vivek mentioned in his prepared remarks the perfect. Thank you so much.

Got it.

Yeah.

Our next question is from Tom Roderick of Stifel. Please proceed with your question.

Great Hi, everybody. Thank you for taking my questions.

You start this first one of its it's a bit of a high level question, but Rajiv you vivek, both sort of referenced this.

500 million run rate, you're running through right now and you know some businesses got hit a little bit of a wall when they get to that half a billion mark in some start to accelerate and I and I guess, what it seems like we're seeing with your businesses. It's a ladder you know your business is accelerating it seems like perhaps some of these bigger deals are coming easier.

And I don't want to suggest.

The world is getting easier for you, but I'd love to hear just a little perspective on you know maybe the critical mass of what you're accumulating as you go through a half a billion and I guess the question behind that would be you know are our larger customers leaning in and buying more at a faster pace and do you feel like the cadence of business is perhaps coming a little fat.

Or an easier to use now that you know you've got the brand the reputation that the public backing behind you.

Just give us some sense of what that means as a public company and about the momentum that you're seeing in the sales cadence.

Well I I can confirm that it is actually feeling and.

We're sensing that that larger companies and their need to consolidate is much more pronounced today. So I think there are three things at play here from what we can see the first one is I think this point solution saturation has hit its peak and you can see if you look around at all the.

Point solution competitors do we used to have and you can see the winners.

And the and the other is separated themselves in both in the SMB space and on the enterprise space right. So you're seeing a lot of companies that that are struggling.

And that's a recognition biologic companies that look I can't afford to have another customer that idea and I know that integration and under the RFP and none of the content ideas and something that doesn't fit into my workflow hadn't gone to integrate another point solution to say unfortunate Adobe. So that's the that's the first place.

It's a point that may make the second point is.

Look we're chasing a very ambitious vision, we know that it would almost building a digital customer operating system, or let's say 36 channels and across different functions, where we're rebuilding the care stack, but today, alright looking future backwards.

It took us many many many years of constantly being under construction and scaffolding all over the place and customers with sensing that now Youre seeing is a lot of that platform building is done and customers are seeing us add features making it easier for them to use and.

And I'll give you an example, where.

I was talking to the.

The head of business commercial sales.

Sales is a large automotive company and they are.

You know in the process of rolling Sprinkle it out and their team basically said that they had never seen consensus across all their markets and wanting one solution and it's the first time and I think we're running their rfps. They got called from several marketing please picks thing.

So what you're seeing is the practitioners are seeing that the platform is stable.

It is easier to use.

And that noise is going away and the executives are beginning to see the need to consolidate and get closer to customers.

So it's it's the the market maturity number one the platform maturity number two and the third thing is look I think where we were hoping in its very early still market doesn't know our story, but it's beginning to and I I when I when I just look at the meetings that we have now.

I told you I mean, we're just counting the other day 45 meeting the last few months.

And really most of it is with the C suite and you know what there is to see do you have a large pharma company or the CMO of a global CPG company.

It's getting the attention that we're a strategic partner and I'm I'm like hearing this concept of okay. We need a third platform when we need a fourth platform, sometimes three sometimes its fourth very often is three and and you know it's the Microsoft Field Force.

Adobe and then figuring out all the overlap and that we emerge as the consolidator of the other noise for modern channels and that's the theme, that's helping us and and you know hopefully with every one of these calls to be doing every report that you're right.

Getting our story out is all we need because we've got happy customers, saying, great things about how we're.

Our strategic partner for them.

Yeah, that's really helpful. Roger I appreciate the thought of the ambitious vision because it certainly seems like that's where we're headed.

I wanted to just talk really quickly your ask really quickly about self service here, particularly now that carries out with self serve as well it might be a good question for Chris just relative to the cost associated with supporting that obviously that could be a really efficient sales channel. Once it's up and running can you just talk about some of the infrastructure needs you might have from a you know for.

A billing and and and and go to market perspective, as well as any other things that we ought to be thinking about from an investment perspective to support the buildup of that of that self serve business model.

Yes, Tom let me just kick it off and push will add to it I wanted to say that the self service product for US is our user interface. It's a skin on the same underlying infrastructure. That's been built for 12 years. So it's not like we have taken a large chunk of our engineering team and think well build out of the product because this unified platform architecture.

We think we've done a really good job of for 12 years and.

All the expenses up there so for us to put another UI skin simplifying all the configurations, we've been doing anyway to simplify our enterprise implementation. So broader company engineering and go to market. It's just not a big lift for us Chris Yeah. So I'll just hit on the key point. There. This is this isn't a big lift for its really.

A subset of what we've always been doing and have been doing for the last 10 plus years. So so yes, there's a little bit of tweaking around the edges to them, but this isn't a significant investment like you you would think if we were going into a completely different area of the business.

We have reached the end of the question and answer session I will now turn the call back over to management for closing remarks.

I'll close with the thing that I always say, we're here to do three things, we think there's a category coming and whatever we end up calling if you called it a unified customer experience management and it says you now connects to the CRM, the transactional data and consolidates a lot of the operating.

Heavy lifting that happens around this platform would make a salesperson sells better campers and take care of customers better consumer inside person get better insights faster and I think we will end up being very strategic and the second is we're trying to do something different culturally as in our enterprise.

Software space, they want to build the world's most loved enterprise software company what that means is we have to.

Approach, our customers sales market delivered very differently and I am very encourage by the progress we're making on that front and then lastly, we want to set the benchmark for employee culture, where we treat one another like family and take care of each other while we obsess about customers. So I want to thank you all for your interest in <unk>.

As we always say this is a 510 15 2030, Iran and we want to build a beautiful company and every other short term priority will be subservient to this long term vision for now. Thank you again and please have a great evening.

This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation and have a great evening.

[music].

Yeah.

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